Cliff Rudolph's Insurance Blog

How does the Medicare, Medicaid and SCHIP Extension Act of 2007 affect your organization? If you are an RRE, have you registered yet?

The Medicare and Medicaid and SCHIP Extension Act of 2007 comes into effect in 2010.

The new act imposes mandatory reporting requirements for liability insurance (including self insured’s), no fault insurance and workers’ compensation and will impact many organizations.

Simply put; section 111 of this new Act imposes an obligation on the primary payers to identify claimants entitled to Medicare or Medicaid and report these claims to Medicare electronically.

For more information (180 pages) visit the Centers for Medicare & Medicaid Service (CMS) website.

http://www.cms.hhs.gov/MandatoryInsRep/Downloads/NGHPUserGuide031609.pdf

Who needs to report?

The key is to define if your client is likely to meet the definition of a Responsible Reporting Entity (RRE).

The best rule of thumb is:

If you pay a claimant who is Medicare or Medicaid eligible they are the RRE.

The best way to identify the RRE to answer the following:

If you are fully insured on an auto liability policy, with no deductible – The insurance company is the RRE.
If you decide not to report the claim for any reason (Concerns with increased premiums, etc.) – You are the RRE.
If you are self-insured for workers’ compensation up to $500,000, with an excess policy for claims above $500,000. You are the RRE, until the excess policy is triggered.
If you are with the State Fund for Washington Workers’ Compensation – We believe L&I is the RRE.

If you have a protection & indemnity policy for marine exposures, and it is written on a duty to indemnify basis (the insurer reimburses what the client has paid) – Some attorneys are saying you are the RRE; Marine insurers are saying that you are the RRE. This issue has not yet been addressed by the CMS. –

As you can see, there are “gray” areas. But what is certain, if you are or could be an RRE, you will need to register with the CMS during the registration period , beginning July 1 through September 30, 2009.

For more information about registration visit:

http://www.cms.hhs.gov/mandatoryInsRep/05_Computer_Based_Training.asp

A self insured organization with a Third Party Administrator (TPA) can designate the TPA to be the Reporting Agent (RA). However you are still responsible for registering and will remain responsible for the results of that reporting.

What are the consequences of not reporting if you are the RRE?

The penalty for non-compliance is $1000 per day, per claim. So it is important that you register and comply with this new law.

Will injuries due to employee wellness programs "fall" to workers compensation?

Julie Ferguson blogs about Injuries at the gym and whether they would fall under workers compensation as a result of employee compensability, incentives, and wellness. http://www.workerscompinsider.com/archives/001082.html.

She was following Roberto Ceniceros blog on a New York appeals court ruling which awarded workers compensation benefits for an injury that occured at a clients gym, whom the claimant performed contract work.  While the employer had not been compensated or required participation at the gym, it was found that the employer had encouraged the claimant to participate. http://www.businessinsurance.com/article/20090710/BLOGS02/907109997

While wellness programs have been around for decades, they continue to build steam as employers look to find ways to control employee benefit costs.  However, Julie and Roberto bring up interesting points. 

If an employer encourages, provides incentives, or in some way an employee feels they have been intimidated or coerced to participate, and an injury occurs, would workers compensation benefits be paid? If so, will underwriters rate for this? Will Workers Compensation costs go up?

Consider for a moment the opportunity for fraud... At our firm, our wellness team has organized many events including a walk-a-thon, yoga, boot camp, and many other fun activities.  But what if an employee, after work, while walking and tracking his/her miles for the walk-a-thon fell and broke his/her leg and was out for two weeks? How would anyone be certain that this was a work related injury due to the wellness program, and not just an injury he/she sustained doing general chores around the house?

Tough questions that are sure to be tested in court.  We'll have to wait and see. 

Risk Management for Employees Traveling Abroad

In many of the world’s leading danger zones -- Mexico, Ecuador, Venezuela, Brazil and Colombia -- the kidnapping of North American executives for ransom has long been a growth industry. Today, as the age of corporate globalization collides with international terrorism, U.S. companies are expanding their risks as rapidly as they broaden their reach. 

Unfortunately, while North American executives and their families are popular kidnapping targets, U.S. business has been slow to manage kidnap and ransom risks effectively. What’s the best way for employers to prepare for and mitigate losses associated with kidnappings? The international risk management experts at Parker, Smith & Feek, Inc, an Assurex Global Partner and the area’s leading commercial insurance brokerage, recommends any employer sending employees into high-risk countries purchase kidnap and ransom (K&R) insurance coverage.

You can find the rest of this article here:

http://www.psfinc.com/press/risk-management-for-employees-traveling-abroad